A check-list of mushroom corals (Fungiidae) is given with annotations on their distribution in Madang Lagoon, northern Papua New Guinea, Bismarck Sea. A total of 36 fungiid species is recorded from this locality, which is more than from any other studied so far. One species, Cantharellus jebbi spec, nov., is new to science. It is the only monostomatous mushroom coral species known that is entirely encrusting. It also represents the first record of a recent Cantharellus species in the IndoMalayan region.